S&P: Buybacks in S&P 500 More Than Doubled in Third Quarter

Stock buybacks at companies in the Standard & Poor’s 500 Index more than doubled in the third quarter from the same period last and will increase again in the year’s final three months, S&P said.

Buybacks among S&P 500 companies increased to $79.56 billion from $34.85 billion in the third quarter of 2009, S&P said in a release today. The amount was a 2.5 percent increase from the second quarter, marking the fifth straight quarterly increase, the statement said.

“While we do not expect a return to the 2005-2007 buyback bonanza, we do see this as a strong, positive sign for the overall health of the market,” Howard Silverblatt, senior index analyst at S&P Indexes, said in the release. He predicts buybacks will increase “slightly” in the fourth quarter, then that companies will be “cautious” with buyback plans in the first part of 2011.

The S&P 500 has risen 84 percent from its low in March 2009 as earnings increased, the Federal Reserve said it will buy bonds to stoke growth, and companies cut costs. Goldman Sachs Group Inc.’s David Kostin, the most-accurate U.S. strategist this year, said in a report this month that companies hold more than $1 trillion in cash, the most ever compared with the value of their assets.

Stock buybacks at companies in the Standard Poor s 500 Index more than doubled in the third quarter from the same period last and will increase again in the year s final three months, S P said.Buybacks among S P 500 companies increased to $79.56 billion from $34.85...